Years ago, I found myself sitting in law school in Moot Court wearing an oversized itchy blue suit. It was a horrible experience. In a desperate attempt to avoid anything like that in the future I enrolled in a tax course. I loved it. I signed up for another. Before I knew it, in addition to my JD, I had a LL.M Taxation. I needed only to don my cape…. taxgirl® was born. Today, I live and work in Philadelphia, PA, one of the best cities in the world (I can't even complain about the sports teams these days). I landed in the City of Brotherly Love by way of Temple University School of Law. While at law school, I interned at the estates attorney division of the IRS. At IRS, I participated in the review and audit of federal estate tax returns. I even took the lead on a successful audit. At audit, opposing counsel read my report, looked at his file and said, “Gentlemen, she’s exactly right.” I nearly fainted. It was a short jump from there to practicing, teaching, writing and breathing tax.

Janeane Garofalo Finds Out She's Been Married... For 20 Years

NEW YORK, NY - FEBRUARY 27: Janeane Garofalo attends the New Group Gala 2012: Cabaret Soiree at The Edison Ballroom on February 27, 2012 in New York City. (Image credit: WireImage via @daylife)

What happens in Vegas, stays in Vegas.

Stand-up comedian Janeane Garofalo found out that was no joke – the hard way.

Over the weekend, Garofalo found out that she was married to Rob Cohen. Cohen, best known for producing the Big Bang Theory, dated Garofalo for about a year before hitting Vegas one night in 1991. After a few drinks, the couple got married at a drive-through chapel in a cab. That marriage was legal – unbeknownst to Garofalo and Cohen – and they were married “for real” until they legally dissolved the marriage twenty years later.

It sounds impossible but it happens. According to family lawyer David Crosson of Philadelphia, Pennsylvania, despite the giggles and funny movies, “Vegas weddings are no joke.” You can, he said, “absolutely… stay married without knowing it.” Fortunately for Garofalo, the fix may have been just as simple as Garofalo suggested, when she said that she and Cohen dissolved the wedding over the weekend in the space of about 30 minutes. Crosson suggests that, depending on the circumstances, even if the marriage weren’t annulled, it might have been a relatively easy fix since neither party realized that they were married.

With that, Garofalo can go back to being single and Cohen can move forward to his upcoming marriage to Jill Leiderman, a producer on Jimmy Kimmel Live.

Except for three little letters: IRS.

For the last 20 years, Garofalo, who made millions for her work in stand-up and in such films as Reality Bites, The Cable Guy and 200 Cigarettes, over the past twenty years, has likely been filing her taxes as single. Likewise, Cohen, who didn’t do so badly himself over the same time period has also likely been filing his taxes as single.

So, for 20 years, Garofalo and Cohen have been filing tax returns with the wrong marital status. If that had happened in today’s tax climate, they would likely be just fine: joint filers tend to have a reduced or relatively equal tax bill to two single filers with similar incomes. However, the 1990s, when Garofalo and Cohen got married, were the heyday of the so-called “marriage penalty” when it was actually disadvantageous to file jointly for double income married taxpayers.

Here’s the quick history: in 1948, Congress adopted a joint tax return for married couples. Years later, the joint tax return became problematic with the rise of the two-income family because it was difficult to work out equitable deductions and tax rates for a “one size fits all” family. In 1969, Congress changed the rules to provide for a joint return for married persons with a scaled-down deduction equal to less than two single filers. This system, with some minor concessions in 1986 to higher income joint filers, remained in place for more than thirty years.

By the 1990s, single filers who lived together without being married enjoyed tax advantages not available to married filers. This happened because, as individual income levels rose, so did the income tax brackets for single filers. However, single filers retained the full personal exemption and standard deduction, unlike married filers. Additionally, the impact of the “phase out” which limits or eliminates many deductions and credits at certain AGI (adjusted gross income) levels was more dramatic for high-income married filers than for high-income single filers so married couples lost itemized deductions and personal exemptions more quickly. As a result, capital losses and passive activity loss deductions were less favorable for a married couple than for two single persons – in some instances, a married couple’s total loss deductions was equal to a single person’s loss.

As you can imagine, this didn’t make married taxpayers happy. In 2001, a bill was signed which offered some relief for married couples. The tax law gradually increased the standard deduction for married taxpayers who file jointly to an amount equal to twice the standard deduction of persons filing a single return, resembling the original 1948 bill that allowed two full deductions for married couples regardless of the level of income. This increase was phased in over five years beginning in 2005 – about 15 years after Garofalo and Cohen got hitched.

So what does it all mean? Chances are, if IRS were to target the couple, they would owe additional tax. Fortunately, the statute of limitations likely bars the IRS from going back any further than 2008 (assuming no fraud and timely filings).

I am sure Garofalo and Cohen have tax and family law counsel on it, to ensure that it doesn’t become a bigger deal. For her part, Garofalo, who has since stopped drinking, was able to joke about the ordeal, referring to it as “a 20-year hangover.”

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This makes for a good story, only by omitting a law that makes it a non-story. Couples living apart, for the last six months of a year, can file as single. This certainly applies to this couple for recent years.

Isn’t the 2001 marriage penalty relief just for married couples with joint incomes below about $130K?

Also, there is still a problem where 2-earner couples are subsidizing one-earner couples’ Social Security and Medicare (especially Social Security). This is not a “marriage penalty” problem but more a problem in the design of the system.

There is also a secondary earner bias problem in general, I believe.

Ed McCaffrey’s “Taxing Women” is a great primer on this issue.

I’d like to see the US go to a system of individual returns with a simplified version of a partnership return for married couples, so that one partner is not paying tax on the other’s income (even if couples actually share income, this still distorts the earning of one partner) and one partner is not getting deductions/credits for the other’s expenses (for example, if a couple assigns child care responsibility to the woman, she should get the credit/deduction). I am someone who believes both parents are responsible for child care and both parents are responsible for contributing income, and I don’t like how the current system works against that.

How did they belatedly find out that they were married? They didn’t undertake to marry anyone else in the meantime, and thus didn’t commit bigamy?

It’s a good thing that both wanted out in the way they did, so it could be resolved amicably. It might have been messy if that hadn’t been the case and one had become fabulously wealthy while the other was impoverished.